MIRA INFORM REPORT
|
Report Date : |
11.06.2013 |
IDENTIFICATION DETAILS
|
Name : |
ESSAR STEEL INDIA LIMITED (w.e.f.18.01.2012) |
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Formerly Known
As : |
ESSAR STEEL LIMITED |
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Registered
Office : |
27Km., Surat Hazira Road, Hazira, Surat – 394270, Gujarat |
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Country : |
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Financials (as
on) : |
31.03.2011 |
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Date of
Incorporation : |
01.06.1976 |
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Com. Reg. No.: |
04-013787 |
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Capital Investment
/ Paid-up Capital : |
Rs.
25710.000 Millions |
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CIN No.: [Company Identification
No.] |
U27100GJ1976FLC013787 |
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PAN No.: [Permanent Account No.] |
AAACE1741P |
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Legal Form : |
A Closely Held Public Limited Liability Company |
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Line of Business
: |
Manufacturing and Selling of Steel Products. |
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No. of Employees
: |
Not Available |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba (42) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
USD 4220000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Slow but correct |
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Litigation : |
Clear |
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Comments : |
Subject is a part of Essar Group It is a well established and reputed company having a satisfactory
track record. The management has failed to file its financial with government
department since 2011. As per previous year’s, the company has recorded loss. However,
general position appears to be strong. Subject gets good support from its
group companies. Trade relations are reported to be fair. Business is active. Payments
are reported to be slow but correct. In view of experienced promoters and strong holding, the company can
be considered normal for business dealings at usual trade terms and
conditions. |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31st, 2013
|
Country Name |
Previous Rating (31.12.2012) |
Current Rating (31.03.2013) |
|
India |
A1 |
A1 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
EXTERNAL AGENCY RATING
|
Rating Agency Name |
CARE |
|
Rating |
Long Term Bank Facilities : BBB- |
|
Rating Explanation |
Moderate degree of safety and moderate credit risk. |
|
Date |
April 2013 |
|
Rating Agency Name |
CARE |
|
Rating |
Short Term Bank Facilities : A3 |
|
Rating Explanation |
Moderate degree of safety and higher credit risk. |
|
Date |
April 2013 |
RBI DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter
in the publicly available RBI Defaulters’ list.
EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS
Subject’s name is not enlisted as a defaulter in
the publicly available EPF (Employee Provident Fund) Defaulters’ list as of
31-03-2012.
LOCATIONS
|
Registered Office / Plant 1 : |
27Km., Surat Hazira Road, Hazira, Surat – 394270, Gujarat, India |
|
Tel. No.: |
91-261-2872400/ 6682400 |
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Fax No.: |
91-261-2872400/ 6682796 |
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E-Mail : |
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Website : |
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Corporate Office : |
Essar House, 11, Keshavrao Khadye Marg, Mahalaxmi, Mumbai – 400034,
Maharashtra, India |
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Tel. No.: |
91-22-66601100 / 24950606 |
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Fax No.: |
91-22-24928896 |
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|
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Marketing and Sales Office : |
6th Floor, Tower-2, Equinox Business Park (Peninsula Techno
Park) Off Bandra Kurla Complex, LBS Marg, Kurla (West), Mumbai - 400070,
Maharashtra, India |
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Tel. No.: |
91-22-67335000 |
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Fax No.: |
91-22-67082189 |
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E-Mail : |
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Plant 2 : |
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Tel. No.: |
91-891-2523213 |
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Fax No.: |
91-891-2559383/ 2556907 |
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Overseas Offices [Plants] : |
Located at Ø Canada Ø Indonesia Ø United Kingdom Ø United Arab
Emirates Ø Germany Ø China |
DIRECTORS
AS ON 30.09.2010
|
Name : |
Mr. Venkatesan Venkataraman Singanallur |
|
Designation : |
Director |
|
Address : |
F-401, The Atrium, Old 49, New 22, Kalashetra Road, Thiruvamiyu,
Chennai – 600041, Tamilnadu, India |
|
Date of Birth/Age : |
01.10.1939 |
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Date of Appointment : |
28.11.1991 |
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DIN No.: |
00004010 |
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Name : |
Mr. Vikram Harishchandra Amin |
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Designation : |
Whole-time director |
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Address : |
Panhar Apartment, No.5A, Plot No.5, KAG Khan Marg, Worli Sea Face,
Mumbai-400018, Maharashtra, India |
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Date of Birth/Age : |
07.12.1958 |
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Date of Appointment : |
31.10.2001 |
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DIN No.: |
00008119 |
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Name : |
Mr. Govindaraghavan Venkatraman |
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Designation : |
Director |
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Address : |
171 and 172 Tower B, Kalpataru Residency, Opposite Cine Planet, Kamani
Marg, Sion (East), Mumbai – 400022, Maharashtra, India |
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Date of Birth/Age : |
16.07.1945 |
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Date of Appointment : |
29.01.2007 |
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DIN No.: |
00008683 |
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Name : |
Mr. Kiznagar Venkatesan Krishnamurthy |
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Designation : |
Director |
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Address : |
174, Kalpataru Residency Tower, Opposite Cine Planet Road No.8, Sion (East),
Mumbai – 400022, Maharashtra, India |
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Date of Birth/Age : |
08.05.1943 |
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Date of Appointment : |
31.10.2006 |
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DIN No.: |
00025075 |
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|
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Name : |
Mr. Jitender Balakrishnan |
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Designation : |
Director |
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Address : |
A-1, Flat No.12, Tanna Residency, Prabhadevi, Mumbai - 400025,
Maharashtra, India |
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Date of Birth/Age : |
08.05.1949 |
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Date of Appointment : |
30.09.2010 |
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DIN No.: |
00028320 |
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Name : |
Mr. Jatinder Dinanath Mehra |
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Designation : |
Director |
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Address : |
Block C-1/36, Safarjang Development Area, |
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Date of Birth/Age : |
03.03.1939 |
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Date of Appointment : |
25.06.1997 |
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DIN No.: |
00042789 |
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Name : |
Mr. Shashikant Nandkishore Ruia |
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Designation : |
Director |
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Address : |
67-A, Walkeshwar Road, Opposite, Birla School, Walkeshwar, Mumbai –
400006, Maharashtra, India |
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Date of Birth/Age : |
23.12.1943 |
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Date of Appointment : |
01.06.1976 |
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DIN No.: |
00047050 |
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Name : |
Mr. Rewant Ravikant Ruia |
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Designation : |
Director |
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Address : |
Bin Hamooda Villa No.17, Plot No. 992, 332/14, Jumeriah, Dubai, U.A.E |
|
Date of Birth/Age : |
20.03.1983 |
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Date of Appointment : |
29.01.2007 |
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DIN No.: |
01187519 |
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|
|
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Name : |
Mr. Prashant Shashikant Ruia |
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Designation : |
Director |
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Address : |
Bin Hamooda Villa No.17, Plot No. 992, 332/14, Jumeriah, Dubai, U.A.E |
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Date of Birth/Age : |
04.06.1969 |
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Date of Appointment : |
22.12.1987 |
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Voter ID No.: |
MT/04/024/099773 |
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DIN No.: |
01187548 |
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Name : |
Mr. Mahadev Ramnath Iyer |
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Designation : |
Whole-time director |
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Address : |
109/110, Indira Apartments, Govandi Station Road, Deonar,
Mumbai-400088, Maharashtra, India |
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Date of Birth/Age : |
01.07.1958 |
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Date of Appointment : |
16.02.2009 |
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DIN No.: |
01871295 |
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Name : |
Mr. Dilip Cherial Oommen |
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Designation : |
Managing Director |
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Address : |
D-3/4, Nandniketan Towership, Hazira, Surat – 394270, Gujarat, India |
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Date of Birth/Age : |
28.03.1958 |
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Date of Appointment : |
17.12.2011 |
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DIN No.: |
02285794 |
KEY EXECUTIVES
|
Name : |
Mr. Narottam Babulal Vyas |
|
Designation : |
Secretary |
|
Address : |
3A/1701, Whispering Palms, Lokhandwala Complex, Akurli Road, Kandivali
(East), Mumbai – 400101, Maharashtra, India |
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Date of Birth/Age : |
03.07.1954 |
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Date of Appointment : |
01.10.2002 |
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PAN No.: |
AAEPV9402H |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
Note:
Major Shareholders details are not available
AS ON 21.01.2012
|
Name of Allottees |
|
No. of Shares |
|
Essar Steel Limited, |
|
12106294 |
|
|
|
|
|
Total |
|
12106294 |
AS ON 30.09.2010
|
Equity Share
Breakup |
|
Percentage of
Holding |
|
Category |
|
|
|
Public financial companies |
|
0.03 |
|
Foreign holdings [Foreign institutional investors, Foreign Companies,
Foreign Financial Institutions, Non-resident Indian or Overseas corporate
bodies or others] |
|
88.44 |
|
Bodies corporate |
|
8.65 |
|
Other top fifty shareholders |
|
0.23 |
|
Others |
|
2.65 |
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Total |
|
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturing and Selling of Steel Products. |
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Products : |
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PRODUCTION STATUS (AS ON 31.03.2011)
Licensed Capacity - *
Installed Capacity
(as certified by the management) per annum
|
Particulars |
Unit |
31.03.2011 |
|
|
MT |
8000000 |
|
Hot Briquette Iron / Direct Reduced Iron (Trial Run 17,00,000 MT) |
|
6700000 |
|
Hot Metal (Under Trial run) |
MT |
1730000 |
|
Hot Rolled Coil |
MT |
3600000 |
|
Cold Rolled Coil |
MT |
2110000 |
|
Colour Coating |
MT |
400000 |
|
Plates |
MT |
1500000 |
|
Pipes (Including Capacity of L-Saw Plant under Trial Run 325,000 MT) |
MT |
600000 |
PRODUCTION
|
Particulars |
Unit |
31.03.2011 |
|
|
MT |
5081082 |
|
Hot Briquette
Iron / Direct Reduced Iron (Including trial run production of 411,782 MT) |
MT |
4237809 |
|
Hot Metal (Under Trial Run) |
MT |
373354 |
|
Hot Rolled Coils/Cold Rolled Coils/ Plates |
MT |
3217932 |
|
Plates (Including trial run production of 77,910 MT) |
MT |
366606 |
|
Pipes (Including trial run production of L-Saw 24,503 MT) |
MT |
101803 |
* Not applicable in terms of Government of India's Notification No. S.O.477 (E) dated 25th July, 1991.
** Includes production of Pellets on Job Work Basis of
172882 MT
GENERAL INFORMATION
|
No. of Employees : |
Not Available |
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Bankers : |
Ø Syndicate Bank,
3rd Floor, 10 Homji Street, Fort, Mumbai – 400023, Maharashtra,
India Ø HSBC (Singapore)
Ø Standard
Chartered Bank (Thailand) Ø Allahabad Bank Ø Andhra Bank Ø Axis Bank Limited Ø Bank of Baroda Ø Bank of India Ø CANARA Bank Ø Central Bank of India Ø Corporation Bank Ø Dena Bank Ø Export Import Bank of India Ø Federal Bank Limited Ø HDFC Bank Limited Ø ICICI Bank Limited Ø IDBI Bank Limited Ø Indian Bank Ø Indian Overseas Bank Ø Jammu and Kashmir Bank Ø Oriental Bank of Commerce Ø Punjab National Bank Ø Punjab and Sind Bank Ø SBI Commercial and International Bank
Limited Ø State Bank of Bikaner and Jaipur Ø State Bank of Hyderabad Ø State Bank of India Ø State Bank of Mysore Ø State Bank of Patiala Ø UCO Bank Ø Union Bank of India Ø United Bank of India Ø Yes Bank Limited |
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Facilities : |
Footnotes (A) From Financial Institutions and others (B) From Financial Institutions and others (C) Includes Buyers' credit for Operational use (D) Includes Buyers' credit for Operational use (E) Includes Buyers' credit for Capital Expenditure (F) Includes Buyers' credit for Capital Expenditure |
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Banking
Relations : |
-- |
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Auditors : |
|
|
Name : |
Deloitte Haskins and Sells Chartered Accountants |
|
Address : |
Mumbai, |
|
PAN No.: |
AABFD7919A |
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|
|
|
Holding Company : |
Ø Essar Steel
Holdings Limited, Mauritius Ø Essar Global
Limited, Cayman Islands (Holding Company of Essar Steel Holdings Limited) |
|
|
|
|
Subsidiaries : |
Ø Essar Steel
Middle East FZE, United Arab Emirates (ESMEF) Ø Essar Steel
Trading FZE, United Arab Emirates (ESTF) Ø Essar Steel
Offshore Limited, Mauritius (ESOSL) Ø Essar Steel
Overseas Limited, Mauritius (ESOL) |
|
|
|
|
Associates : |
Ø Bhander Power
Limited, India (BPOL) [U31101GJ1995PLC065146] Ø Essar Bulk
Terminals Limited, India (EBTL) [U13100GJ2004PLC043477] Ø Essar Bulk
Terminal Paradeep Limited (EBTPL) Ø Essar Power
Limited, India (EPOL) [U40100GJ1991PLC064824] Ø Essar Power (Orissa)
Limited (EPOL - Orissa) Ø Essar Steel
Processing Fzco (ESP FZCO) |
|
|
|
|
Fellow Subsidiary : |
Ø Aegis Limited,
India (AEGIS) [U99999MH1992PLC064767] Ø Essar Energy
Holding Limited (EEHL) Ø Essar Logistics Limited,
India (ELL) [U63000MH2004PLC149214] Ø Essar Mineral
Resources Limited (EMRL) Ø Essar Oil
Limited, India (EOL) [L11100GJ1989PLC032116} Ø Essar Offshore
Subsea Limited (EOSL) Ø Essar Power
Gujarat Limited, India (EPGL) [U74900GJ2007PLC066273] Ø Essar Heavy
Engineering Service (EPIL) Ø Essar Projects
(India) Limited, India (EPIL)[U99999MH1989PLC053280] Ø Essar Project
Management Consultant Limited (EPMCL) [U74140MH2007PLC175845] Ø Essar Power
(Jharkhand) Limited (EPJL) Ø Essar Power (M
P) Limited, India (EPMPL) [U40100DL2005PLC201961] Ø Essar Steel
Algoma Inc. United States (ESA-INC) Ø Essar Sez Hazira
Limited, India (ESEZHL) [U70100MH2006FLC159272] Ø Essar Steel
Processing and Distribution UK (ESP&D) Ø Essar Shipping
Port and Logistics Limited (ESPLL) Ø Essar Shipping
and Logistics Limited (ESLL) Ø Pt Essar
Indonesia, Indonesia (PTEI) Ø Vadinar Oil
Terminals Limited (VOTL) Ø Vadinar Power
Company Limited (VPOCL) Ø Teletech
Investments (India) Limited (TIIL) Ø Essar Project
Limited (EPL) Ø Essar Minerals
Americas (EMA) Ø Essar Power
Hazira Limited (EPHL) |
|
|
|
|
Companies in which
promoters have significant influence/control: |
Ø Arkay Holdings
Limited, India (AHL) [U01120MH1993PLC071726] Ø Essar Agrotech
Limited (EAL) Ø Essar
Engineering Services Limited (EESL) Ø Essar House
Limited, India (EHL) [U70100MH1982PLC117644] Ø Essar
Investments Limited, India (EIL) [L99999MH1976PLC034721] Ø Essar
Infrastructure Services Limited, India (EISL) [U64202MH1995PLC087774] Ø Essar
Information Technology Limited, India (EITL) [U72200MH1992PLC064816] Ø Essar Properties
Limited, India (EPRL) [U93090TN1983PLC019552] Ø Essar
Procurement Services Limited (EPSL) Ø Essar Steel
Chhattisgarh Limited, India (ESCL) [U27100GJ2005FLC046274] Ø Essar Steel
Hypermarts Limited, India (ESHML) [U27106MH2007PLC172940] Ø Essar Steel
Jharkhand Limited, India (ESJL) [U27100GJ2005PLC046272] Ø Essar Telecom
Investment Limited (ETIL) Ø Futura Travels
Limited, India (FTL) [U63040MH1990PLC056592] Ø Imperial
Consultants and Securities, India (ICSL) (Formally known as Essar Holding
Limited) [U65993TN1993PTC024724] Ø India Securities
Limited, India (ISL) [L99999TN1984PLC075902] Ø Kroner
Investment Limited (KIL) Ø Nirmit Estates
Private Limited (NEPL) Ø New Ambi Trading
and Investments Private Limited, India [U51900MH1980PTC023584] Ø Pratik Estates
Limited (PEL) Ø Prajakta Finance
and Trading Limited (PFTL) Ø Paprika Media
Private Limited (PMPL) Ø Prajesh
Investments Private Limited, India (PIPL) [U65990MH1989PTC054274] Ø Samarjit
Investment Private Limited (SIPL) Ø Trikaya
Investments Limited (TIL) Ø The Mobilestore
Limited (TML) Ø Essar Telecom
Retail Limited (ETRL) Ø Prajesh
Marketing Limited (PML) Ø Essar
Teleholding Limited (ETHL) Ø Samarjit Estates
Private Limited, India (SEPL) [U70200MH1989PTC053092] Ø Golden
Merchandisers Private Limited, India (GMPL) [U51909GJ1995PTC024403] Ø Swarna Ganga
Holdings and Estate Development Private Limited, India (SGHEDPL)
[U70100MH1995PTC088883] Ø Kartik Estates
Private Limited, India (KEPL) [U70100MH1989PTC053169] |
CAPITAL STRUCTURE
AFTER 17.12.2011
Authorized
Capital: Rs. 72750.000 Millions
Issued, Subscribed
and Paid Up Capital: Rs. 28411.336 Millions
AS ON 31.03.2011
Authorized Capital:
|
No. of Shares |
Type |
Value |
Amount |
|
7175000000 |
Equity Shares |
Rs.10/- each |
Rs. 71750.000 Millions |
|
100000000 |
10% Cumulative Redeemable Preference Shares |
Rs.10/- each |
Rs. 1000.000 Millions |
|
|
|
|
|
|
|
Total |
|
Rs. 72750.000
Millions |
Issued, Subscribed & Paid-up Capital:
|
No. of Shares |
Type |
Value |
Amount |
|
2527400000 |
Equity Shares |
Rs.10/- each |
Rs.
25274.000 Millions |
|
43600000 |
10% Cumulative Redeemable Preference Shares |
Rs.10/- each |
Rs. 436.000
Millions |
|
|
|
|
|
|
|
Total |
|
Rs. 25710.000 Millions |
Of the above
(a) 3987538 Equity Shares of Rs.10 each were allotted as fully paid up Bonus Shares by capitalization of General Reserve.
(b) 1073399784 Equity Shares of Rs.10 each were allotted as fully paid up for consideration other than cash.
(c) 2218196045* Equity shares of Rs.10 each are held by Essar Steel Holding Limited, Mauritius, the holding Company.
(d) Nil equity shares Rs.10 each are held by Hazira Steel-2, subsidiary of ultimate holding company.
(e) Nil Equity Shares of Rs.10 each are held by Teletech
Investments (
* As informed by Essar Steel Holding Limited,
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
25710.000 |
22573.300 |
11840.800 |
|
|
2] Share Application Money (Pending Allotment) |
2482.400 |
335.300 |
0.000 |
|
|
3] Reserves & Surplus |
77329.800 |
68387.000 |
0.000 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
35915.800 |
|
|
NETWORTH |
105522.200 |
91295.600 |
47756.600 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
216732.300 |
165963.500 |
63176.200 |
|
|
2] Unsecured Loans |
7111.600 |
14736.100 |
9937.700 |
|
|
TOTAL BORROWING |
223843.900 |
180699.600 |
73113.900 |
|
|
DEFERRED TAX LIABILITIES |
607.800 |
1172.800 |
1136.800 |
|
|
LONG-TERM ADVANCE FROM CUSTOMERS |
0.000 |
0.000 |
1650.700 |
|
|
|
|
|
|
|
|
TOTAL |
329973.900 |
273168.000 |
123658.000 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
102544.300 |
92836.800 |
91288.200 |
|
|
Capital work-in-progress |
175083.900 |
144922.000 |
5496.100 |
|
|
|
|
|
|
|
|
INVESTMENT |
3970.200 |
4927.900 |
7913.100 |
|
|
DEFERRED TAX ASSETS |
638.700 |
(1473.700) |
0.000 |
|
|
FOREIGN CURRENCY MONETARY ITEM TRANSLATION DIFFERENCE ACCOUNT |
0.000 |
0.000 |
373.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
52225.000
|
26332.300 |
21575.200 |
|
|
Sundry Debtors |
5147.600
|
4712.400 |
4074.700 |
|
|
Cash & Bank Balances |
9210.000
|
17712.500 |
5081.600 |
|
|
Other Current Assets |
11296.000
|
10561.900 |
1257.800 |
|
|
Loans & Advances |
30251.100
|
20386.100 |
13811.900 |
|
Total
Current Assets |
108129.700
|
79705.200 |
45801.200 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
24331.500
|
20508.500 |
11652.600 |
|
|
Other Current Liabilities |
33101.200
|
22901.700 |
13805.600 |
|
|
Provisions |
2960.200
|
4340.000 |
1755.400 |
|
Total
Current Liabilities |
60392.900
|
47750.200 |
27213.600 |
|
|
Net Current Assets |
47736.800
|
31955.000 |
18587.600 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
329973.900 |
273168.000 |
123658.000 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
123015.000 |
106195.500 |
116883.000 |
|
|
|
Other Income |
5260.900 |
2734.600 |
1851.800 |
|
|
|
TOTAL (A) |
128275.900 |
108930.100 |
118734.800 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Consumption materials changes inventories |
86875.400 |
73462.600 |
|
|
|
|
Manufacturing service costs |
13623.400 |
10540.400 |
|
|
|
|
Employee related expenses |
3012.000 |
2176.900 |
|
|
|
|
Administrative selling other expenses |
7438.100 |
5017.400 |
|
|
|
|
TOTAL (B) |
110948.900 |
91197.300 |
99550.900 |
|
|
|
|
|
|
|
|
Less |
PROFIT/(LOSS)
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
17327.000 |
17732.800 |
19183.900 |
|
|
|
|
|
|
|
|
|
Less |
INTEREST
FINANCIAL EXPENSES (D) |
12187.400 |
9084.000 |
7894.700 |
|
|
|
|
|
|
|
|
|
|
PROFIT/(LOSS)
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
5139.600 |
8648.800 |
11289.200 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
8914.600 |
7928.500 |
8281.100 |
|
|
|
|
|
|
|
|
|
|
PROFIT/(LOSS)
BEFORE TAX (E-F) (G) |
(3775.000) |
720.300 |
3008.100 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
(2112.300) |
495.800 |
1156.100 |
|
|
|
|
|
|
|
|
|
|
PROFIT/(LOSS)
AFTER TAX (G-H) (I) |
(1662.700) |
224.500 |
1852.000 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
18822.700 |
18591.000 |
16739.000 |
|
|
|
|
|
|
|
|
|
|
Balance
Acquired on Amalgamation |
0.000 |
109.200 |
0.000 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Preference Dividend (including DDT) |
76.400 |
102.000 |
0.000 |
|
|
BALANCE CARRIED
TO THE B/S |
17083.600 |
18822.700 |
18591.000 |
|
|
|
|
|
|
|
|
|
|
EARNINGS IN
FOREIGN CURRENCY |
|
|
|
|
|
|
|
FOB Value of Exports |
20227.600 |
11092.300 |
27616.400 |
|
|
|
Others |
1622.200 |
553.900 |
2026.900 |
|
|
TOTAL EARNINGS |
21849.800 |
11646.200 |
29643.300 |
|
|
|
|
|
|
|
|
|
|
IMPORTS |
|
|
|
|
|
|
|
Raw Materials |
8835.600 |
7305.200 |
851.600 |
|
|
|
Production Consumables, Stores and Spares & Fuel |
28469.100 |
7187.600 |
10260.100 |
|
|
|
Capital Goods |
11199.600 |
30994.700 |
1474.700 |
|
|
|
Traded Goods |
358.300 |
528.500 |
0.000 |
|
|
TOTAL IMPORTS |
48862.600 |
46016.000 |
12586.400 |
|
|
|
|
|
|
|
|
|
|
Earnings/ (Loss)
Per Share (Rs.) |
(0.72) |
0.09 |
1.58 |
|
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
(1.30)
|
0.21 |
1.55 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
(3.07)
|
0.68 |
2.57 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
(1.79)
|
0.42 |
2.19 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
(0.04)
|
0.01 |
0.06 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Debt/Networth) |
|
2.12
|
1.98 |
0.65 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
1.79
|
1.67 |
1.68 |
LOCAL AGENCY FURTHER INFORMATION
|
Sr. No. |
Check List by Info Agents |
Available in
Report (Yes / No) |
|
1] |
Year of Establishment |
Yes |
|
2] |
Locality of the firm |
Yes |
|
3] |
Constitutions of the firm |
Yes |
|
4] |
Premises details |
No |
|
5] |
Type of Business |
Yes |
|
6] |
Line of Business |
Yes |
|
7] |
Promoter's background |
Yes |
|
8] |
No. of employees |
No |
|
9] |
Name of person contacted |
No |
|
10] |
Designation of contact
person |
No |
|
11] |
Turnover of firm for last
three years |
Yes |
|
12] |
Profitability for last
three years |
Yes |
|
13] |
Reasons for variation
<> 20% |
-- |
|
14] |
Estimation for coming
financial year |
No |
|
15] |
Capital in the business |
Yes |
|
16] |
Details of sister
concerns |
Yes |
|
17] |
Major suppliers |
No |
|
18] |
Major customers |
No |
|
19] |
Payments terms |
No |
|
20] |
Export / Import details
(if applicable) |
No |
|
21] |
Market information |
-- |
|
22] |
Litigations that the firm
/ promoter involved in |
-- |
|
23] |
Banking Details |
Yes |
|
24] |
Banking facility details |
Yes |
|
25] |
Conduct of the banking
account |
-- |
|
26] |
Buyer visit details |
-- |
|
27] |
Financials, if provided |
Yes |
|
28] |
Incorporation details, if
applicable |
Yes |
|
29] |
Last accounts filed at
ROC |
No |
|
30] |
Major Shareholders, if
available |
No |
|
31] |
Date of Birth of
Proprietor/Partner/Director, if available |
Yes |
|
32] |
PAN of
Proprietor/Partner/Director, if available |
No |
|
33] |
Voter ID No of
Proprietor/Partner/Director, if available |
Yes |
|
34] |
External Agency Rating,
if available |
Yes |
UNSECURED
LOANS
|
Unsecured Loans |
31.03.2011 (Rs. In Millions) |
31.03.2010 (Rs. In Millions) |
|
Debts bonds other instruments unsecured |
0.000 |
(A) 5000.000 |
|
Rupee term loans banks unsecured |
750.000 |
3750.000 |
|
Rupee term loans others unsecured |
(B) 1000.000 |
0.000 |
|
Finance lease obligation long-term unsecured |
(C) 55.000 |
0.000 |
|
Other debt unsecured |
(D) 5306.600 |
(E) 5986.100 |
|
Total |
7111.600 |
14736.100 |
Footnotes
(A) Represents Commercial Paper
(B) Represents Loan from Companies
(C) Finance Lease Obligation (Amount due within one year 10.000 millions)
(D) 1. Buyers' credit for Capital Expenditure 3084.100 Millions 2. Dollar / Rupee Notes [Due within one year Rs.30.200 millions] 1883.700 Millions 3. Sales tax deferral Loan [Due within one year Rs. NIL] 338.800 Millions Refer Other details regarding unsecured debt
(E)
1. Buyers' credit for Capital Expenditure 3704.000 Millions 2. Dollar / Rupee
Notes [Due within one year Rs.30.200 millions] 1943.300 Millions 3. Sales tax
deferral Loan [Due within one year Rs. NIL] 338.800 Millions
NATURE OF OPERATIONS:
The Company owns
and operates an integrated steel manufacturing unit for manufacturing of flat
rolled products at Hazira – District Surat, a Precoated facility at Pune, a
Beneficiation plant at Kirandul, Slurry pipeline and Pelletization plant at
Vizag. The Company is also in the process of setting up a Beneficiation plant
at Dabuna (Orissa) another Slurry pipeline and Pelletization plant at Paradeep.
The company also operates processing and distribution centers, Hypermarts and
Express Marts at various locations across the
GLOBAL SCENARIO
The global economy witnessed slow but steady recovery in year 2010 with leading indicators of economy viz. GDP, Industrial Production, Crude Oil Prices, Purchasing Managers’ Index, etc. improving across all regions post global recession of year 2009. Business confidence increased gradually through the year for most parts of the world. The automotive sector rebounded strongly, construction activities continued to decline, and the recovery of mechanical engineering, domestic appliances, metal goods and other transport equipment sectors remained subdued in 2010.
The fear of double-dip recession in advanced economies is
reduced given the fact that private demand is advancing while fiscal policy
support is diminishing. Financial conditions, though improved remain unusually
fragile particularly in
In many emerging market economies, demand is robust and
overheating is a growing policy concern. Rising food and commodity prices pose
a threat to poor households, adding to social and economic tensions, notably in
the Middle East and
The macroeconomic impact of the earthquake in
Overall, with the recovery stronger on the one hand but oil supply growth lower on the other, projections for global real GDP growth in 2011–12 are moderate.
INDIAN SCENARIO
The growth in Indian economy is expected to be moderate amidst inflationary pressures and rising interest rates. The impact of the past monetary policies and reduction in the pricing power, will slow down Industry and Services growth. The growth is Service Sector is projected to be lower and Industrial growth is likely to decline further. Overall GDP growth is expected to be in the range 7.7-8%. The investment demand is projected to moderate and the private consumption demand too could start slowing down due to increased interest rates in 2011-12. The RBI has revised interest rate upward several times since March 10, a dampener on consumption and growth.
STEEL INDUSTRY
GLOBAL OVERVIEW
Global Steel consumption reached 1283.6 mt in 2010 (up by 13.2% over
2009) which is a record consumption since inception.
The higher growth
rates witnessed in advanced economies reflects the rebound from the severe
downturn of the earlier years.
According to World
Steel Association, the global steel consumption is projected to reach 1359.2
mmt in 2011 (up by 5.9% over 2010). There are however uncertainties due to the
fragility in peripheral European economies, unrest in some oil producing countries
in the Middle East and the earthquake in
In US, the rebound
in apparent steel use is forecast to continue in 2011, reflecting the second
round of quantitative easing and new fiscal policy initiatives
Apparent steel use
in the EU is forecast to grow on the back of an export-driven industrial
rebound. The largest euro zone economies like
The recovery of steel use in the CIS has been healthy mainly due to a
strong rebound from steel-using sectors in
Given the pace of
steel production in the first quarter of 2011, Chinese apparent steel use could
be even higher. However, it is expected that the Chinese government’s efforts
to cool down the overheating economy, particularly the real estate sector, will
impact Chinese steel demand somewhat later this year.
Steel demand in the MENA region is expected to remain stagnant in 2011,
mainly due to downward revisions from North African countries.
DOMESTIC OVERVIEW
The growth
momentum in the Indian steel industry continues.
In the financial
year 2010-11, steel consumption (non-alloy and alloy) in India reached 65.6
mmt, registering a growth of10.6% over FY 2009-10 levels. Finished Steel
production in the country registered a growth of 8% during FY 2010-11 and
reached a level of 66 mmt.
The overall import
of steel though having declined from the previous year’s level, maintained a
high volume of 6.79 mmt. The Exports were marginally up and touched 3.46 mmt as
against 3.25 mmt during previous year. The country continued to be a net
importer of steel by over 3.0 mmt.
To meet the
growing domestic demand, the crude steel capacity is projected to increase from
78 mmt in 2011 to 98.4 mmt in 2012. The Finished Steel production in the
country is estimated to exceed 70 mt during FY 2012.
The outlook for the Indian steel industry looks promising.
OPERATIONS
The FY 2010-11 was a watershed in the history of the Company. The various facilities which were at project stage since last 2 to 3 years have been commissioned during the year and started operation. Further the year has witnessed expansion of capacity to add wide range of products.
The Company is the first in the world to have all three iron making technologies, viz. HBI – DRI, COREX and Blast Furnace at one location. This year the Company achieved highest production.
Key highlights of the year were:
·
The state-of-the-art Plate Mill with an
installed capacity of 1.5 MTPA with Heat Treatment facilities fully
commissioned. It is amongst
· Successful commission of CSP facility enables Company to produce hot-rolled coils up to 0.8 mm thickness, which will find wide applications in the automotive market. This will enable the Company to cater to a wider range of customer segments and product applications.
· The Blast Furnace commissioned on 23 rd November’10 which will help the Company in reducing the production cost by using alternate fuel.
· To reach 10 MTPA capacities, the company has started the following facilities also during the current year:
- ConArc furnace with capacity of 2.5 MTPA
- 6th DRI module
- 4th continuous Caster
- CSP Mill
- 2 Corex modules readied for startup
· Stabilization of DRI process with low grade pellets
· With sustained effort, the Slurry Pipe Line was started in December’10
· The Commissioning of the LSAW mill in the first half of FY 2010-11 added LSAW Pipes to the portfolio of specialized products.
During the year Company produced 3.58MT (flat product) and
achieved sales of 3.34MT, recording an increase of 6% and 3% respectively over
the previous year. During the year, Pellet production at Vizag and Steel
production at Hazira continued to be affected due to the suspension of material
movement through the slurry pipeline from Beneficiation Plant at Kirandul to
the Pellet Plant at Vizag for eight months of the year. This had an adverse
effect on the profitability. The Company undertook various measures to mitigate
the adverse impact by making alternative arrangements of movement of
The transportation of slurry through the 267 KM slurry pipeline from the Beneficiation Plant at Kirandul to the Pellet Plant at Vizag was suspended from May’09 to February’10 due to damage to the Pipeline. The company completed the repair and the restoration work by mid February’10 2010 and Slurry was pumped through the Pipeline to Vizag thereafter.
Since, the pipeline system was lying idle and was not operational for over 8 months, it was imperative to conduct a detailed end-to-end health check up of the entire system for safe and continuous operation. The health checkup activities were in advanced stages of completion and the Company was definitely well poised to complete the same by end March’10 in accordance with the plan and restart the pipeline system immediately thereafter on a continuous basis. Unfortunately, damage to Pumping Station (PS)-2 in Mar’10 forced the Company to halt all further activities at PS-2, while work at other locations continued and were completed as planned. However, the non-availability of PS-2, rendered the entire pipeline system non-operational.
The Company completed the repair and restoration activity at PS-2 and started slurry pumping in a phased manner from 25th November’10. The slurry pumping throughput reached its normal operating capacity on 9th December’10. Since then the Pelletization Complex starting from Beneficiation Plant at Kirandul to the Pellet Plant at Vizag are operating under normal operating conditions. The production levels have picked up again to planned levels in the last quarter.
The company has an Insurance Policy which covers Material Damage loss and Loss of Profit due to Business interruptions including Terrorism Cover. The company has filed an insurance claim of Rs.97.900 Millions for Material Damage loss and Rs.8810.000 Millions for loss of profit (for the indemnity period till 30th September 2010) with the New India Assurance Company. Pending settlement of the claim with the Insurance Company, the amount of the claims has not been recognized in the accounts.
Following were the achievement in major cost parameters and steps taken to achieve cost reduction:
• HBI finished with NG consumption of 290 sm 3 /t in FY 2010-11 against 297 sm 3 /t achieved in FY 2009-10.
• HSM ended with YTD yield of 98.2% for FY 2010-11 as against 97.84% previous year.
• Hot Metal usage started at Plant A to increase productivity and reduce power consumption.
• Consumption of various wastes/by products like Sludge Pond Fines, Mills Scale, flue dust, under size line stone etc. in sinter plant.
SALES AND
MARKETING
• The financial
year 2010-11 saw the global economy recover from the economic crisis which had
stymied growth in the previous year. The Indian economy recovered to register a
GDP growth of 8.5%.
• There had been loss of momentum in industrial growth and this had
affected the performance of the mining and manufacturing sectors.
• The successful
commissioning of the CSP facility enables Essar to produce hot-rolled coils up
to 0.8 mm thickness, which will find wide applications in the automotive
market. This will enable them to cater to a wider range of customer segments
and product applications.
• The year 2010-11
was an eventful one and some performance parameters need to be seen in the
right perspective. Overall sales of flat steel products improved marginally 3%
y-o-y to 3.34 million tones. Export volumes, at 0.55 million tonnes, increased
77% on account of the improved steel demand globally while domestic sales at
2.8 million tonnes dropped marginally by 4.6% y-o-y.
• Revenues were up
18% to Rs.12,827.59 Cr. and net sales realization per tonne increased 18% y-o-y
mainly on account of increase in price globally and more focus on value-added
sales.
• As much as 70%
of sales were made in the value-added segments and this was largely due to
continued emphasis on value-added products, like Electrical, Auto Hi-strength
grade, PEB, API, etc.
• Essar Hypermart
sales in 2010-11 grossed 0.8 million tonnes with revenues of Rs.30050.000 millions.
It extended its footprint across the length and breadth of the country by
adding 23 more outlets from 87 to 110, while their market penetration and reach
was further strengthened by the expansion of the Expressmarts network from 387
to 500.
• With the
addition of Bhuj Service Centre, their current steel processing and
distribution installed capacity in
• Essar Steel’s
focus on innovation was underlined by the following achievements:
o API
certification for plate and pipe products
o Essar Steel
became the first Indian steel producer to bag an order to supply steel for
Volkswagen’s passenger vehicles.
o Essar Steel
became the first Indian private steel producer to be approved by the Indian
Navy for steel supplies to Mazagaon dockyard for production of naval ships.
o
o Essar Steel entered
into an agreement with Kobe Steel,
o Caterpillar has
approved Essar Steel’s indigenously developed quenched and tempered (QT) steel
for its applications.
o Essar Steel
became the only Indian steel company to supply steel for the Tata ‘Nano’.
• One of the
strengths of Essar Steel is its unique, diversified global business model. This
means that they are ideally positioned to benefit when market demand fully
recovers. They strongly believe that the year 2011-12 will be an inflexion
point for Essar Steel and will catapult it to the next level.
FINANCE:
The amalgamation
of the Essar Steel Business in
During the
financial year, the Company successfully consolidated its Rupee Term Debt
facilities under a single loan agreement, thereby simplifying the
administration of debt by the Company and the lenders.
Similarly the
Company also initiated the process of consolidation and enhancement of its
working capital limits under single loan agreement with common terms and
conditions. In order to meet the increased business needs, the enhanced working
capital limits for FY 11-12 has been assessed by the lead bank, State Bank of
India (SBI).
During FY 11, post
amalgamation, the Company has been assigned a rating of ‘CARE A-’ for the long
term debt facilities and a rating of PR2+ for the short term debt facilities by
Credit Analysis and Research Limited (CARE); The rating of ‘CARE A-’ indicates
that the long term debt facilities offer adequate safety for timely servicing
of debt obligations and carry low credit risk. The rating of ‘CARE PR2+’
indicates that the short term debt facilities have adequate capacity for timely
payment of debt obligations.
During the year,
the Company was successful in progressing with its capital expenditure
programme, and meeting its payment obligations.
The company
witnessed several challenges during FY 11 viz. high inflation in the Indian
economy leading to frequent interest rate hikes, debt crisis in European
economies, steep increases in price of metallic inputs, non-operation of slurry
pipeline for major part of the year. With the re-start of the slurry pipeline
in Q3 of FY 11 and successful completion and commissioning of the various
on-going projects on a progressive basis, the Company is well positioned to
realise the benefits from the substantial capital investments made in the last
3 years by increasing its scale of operations and market presence.
CHANGE IN CAPITAL STRUCTURE
During the year the
paid up equity capital of the Company increased from Rs.11840.800 millions to
Rs.25710.000 millions due to allotment of shares made on preferential basis to
Essar Steel Limited, Mauritius, holding company of the Company in accordance
with approval granted by the members under Section 81 of the Companies Act,
1956 at the last annual general meeting.
AMALGAMATION
During the year, Essar Steel (Hazira)
Limited, Hazira Plate Limited, Hazira Pipe Mill Limited and Essar Steel Orissa
Limited have been amalgamated with the Company pursuant to the order passed by
the Hon’ble High Courts at Mumbai and Ahmedabad sanctioning the Scheme of
Amalgamation. The merger will provide a much wider product portfolio to
customers ranging from pellets to Slabs, HRC, CRC, Galvanised and Annealed
Products, Pipes and Plates and also leading to greater economies of scale and
operational synergies.
All the formalities with respect to
Amalgamation have been complied with.
CONTINGENT
LIABILITIES
|
Contingent
Liabilities not provided for |
31.03.2011 (Rs. In Millions) |
31.03.2010 (Rs. In Millions) |
|
(i) (a) Bills discounted |
640.800 |
202.500 |
|
(b) Claims against the Company not acknowledged as debt in respect of: Disputed sales tax matters in respect of which the Company has gone in appeal [including amount already paid Rs.1473.400 millions (Previous year Rs.1473.400 millions)] |
3303.200 |
3306.600 |
|
Disputed Excise duty matters in respect of which the Company has gone in appeal |
13.000 |
10.900 |
|
Disputed Custom duty matters in respect of which the Company has gone in appeal |
1654.900 |
1654.900 |
|
- Tax of sale of electricity demanded by sales tax authorities on Essar Power limited |
459.100 |
459.100 |
|
- Electricity duty
demand ([including amount already paid Rs. 2150.000 millions (Previous year
Rs. NIL millions)]) |
6090.100 |
5868.500 |
|
- Wheeling Charges demanded by Gujarat Electricity Board [including amount already paid Rs.272.300 millions (Previous year Rs.272.300 millions)] |
3930.100 |
2980.100 |
|
Others |
46.900 |
-- |
|
Future cash outflows in respect of above matters are determinable only on receipt of judgments / decisions pending at various forums / authorities. ** "A Show Cause Notice (SON) dated 10th March 2010 has been issued by the Collector of Electricity Duty, Gandhinagar, demanding Electricity Duty Rs.5853.100 millions and Interest Rs.5284.800 millions for the period April 2000 to February 2010. The company has claimed that it is exempt from paying the Electricity Duty for a period of 15 years from the date of commission of the captive power project i.e. from 8th August 1995 to 7th August 2010. The company has filed an appeal to the Division Bench of Gujarat High Court against the order which has been admitted by the court and granted stay order dated 5th April 2010. The conditions of stay were: (i) Company to deposit Rs.500.000 millions. by 30.04.2010. (ii) Company to further pay Rs.150.000 millions every month commencing from 15th May, 2010 towards the arrears of the principal amount of electricity duty, As per the management view and based on the legal opinion from a reputed counsel, the Company is eligible for exemption of Electricity Duty for the period of 15 years i.e. from 8th August 1995 to 7th August 2010 and accordingly no provision is required to be made in the books as at 31st March, 2010 with respect to the afore said demand. However the Company has disclosed Rs. 5868.500 millions (Previous Year Rs. 5096.300 millions) on account of above matter as contingent liability as at 31st March 2010. |
|
|
|
(c) Guarantees given to various banks, financial institutions, finance companies, etc. on behalf of others [Balance outstanding as on 31.03.2011 is Rs.29102.200 millions (Previous Year Rs.7673.500 millions) The Company and Essar Power Limited (EPOL) have provided corporate guarantee of Rs.12120.000 millions (Previous Year Rs.12120.000 millions), on behalf of Loop Telecom Private Limited (LOOP), favouring State Bank of India (SBI) against (a) Term loan of Rs.4000.000 millions (Previous Year Rs.7250.00 millions) and (b) Bank guarantee of Rs.8120.000 millions (Previous Year
Rs.8120.00 millions), availed by Further, the Company has also received counter guarantee for the same from Loop Mobile Holdings India Limited (formerly known as BPL Communications Limited). |
36023.900 |
8693.700 |
|
(ii) Arrears of fixed dividend on Cumulative Redeemable Preference Shares |
0.000 |
44.500 |
BANKERS CHARGES
REPORT AS PER REGISTRY
|
Corporate
identity number of the company |
U27100GJ1976FLC013787 |
|
Name of the
company |
ESSAR STEEL INDIA
LIMITED |
|
Address of the
registered office or of the principal place of business in |
27Km., Surat Hazira Road, Hazira, Surat – 394270, Gujarat , India Email: rakesh.darji@essar.com |
|
This form is for |
Creation of
charge |
|
Type of charge |
Movable Property |
|
Particular of
charge holder |
Syndicate Bank, 3rd Floor, 10 Homji Street, Fort, Mumbai –
400023, Maharashtra, India |
|
Nature of
instrument creating charge |
Composite Hypothecation
Agreement dated February 23, 2012 |
|
Date of
instrument Creating the charge |
23.02.2012 |
|
Amount secured by
the charge |
Rs.2500.000
Millions |
|
Brief of the
principal terms an conditions and extent and operation of the charge |
Rate of Interest Bank rate + 3 %
presently at 13% pa Terms of Repayment Interim facility
of Rs.2500.000 millions to be converted into Long Term loan post financial
closure. Long Term facility to be repaid on 16 quarterly installments
starting from 31.03.2013 and ending on 31.12.2016. Margin Nil Extent and Operation of the charge Subservient
Charge on Movable Fixed Assets and Current Assets of the Company located at
various factories in |
|
Short particulars
of the property or asset(s) charged (including complete address and location
of the property) |
Subservient
Charge on Movable Fixed Assets and Current Assets of the Company located at
Hazira, Dabuna, Paradeep, Vizag. Kirandul and other places in |
FIXED ASSETS:
Tangible Assets
v
v
v Buildings
v Plant and Machinery
v Furniture and Fixtures
v Office Equipment
v Computers
v Vehicles
v Ships and Vessels
v Railway Sidings and Wagons
v Aircraft
Intangible Assets
v Software
PRESS RELEASES
ESSAR STEEL WINS GLOBAL PIPE ORDERS WORTH RS
4000.000 MILLIONS
AUGUST 29, 2012
Essar Steel today announced that it has received two sizeable orders from Middle East and Africa for manufacturing of API (American Petroleum Institute) grade steel pipes worth Rs 4000.000 millions. This takes the total order book of the pipe mill to approximately Rs 10000.000 millions indicating strong order inflow for the company.
The first order in Africa is for the construction of 4000 mt offshore line pipe application which will be used in a Chevron project. Customer from Middle East placed its second order with company for 45000 mt of 48 inch high grade coated pipes that are to be supplied in the coming quarter. This will facilitate the company in strengthening its position in the niche market segment worldwide.
Commenting on the recent order win, Mr. Dilip Oommen, MD and CEO, Essar Steel India said, “This is reflection of Essar Steel’s intergrated capability to produce world class pipes. To cater to the wide range of pipe products manufactured through various routes, our Pipe mill has full-fledged facilities for inspection and testing to ensure production of high quality pipes including sour service. Our aim is to become a preferred supplier of quality steel to all our customers, domestically and globally.”
Essar Steel’s pipe mill has the capability to manufacture 6,00,000 tonnes comprising 2,75,000mt per annum of API-grade HSAW (Helical Submerged Arc Welding) Line pipes, ranging from diameters 16” to 110”, thicknesses 6.4mm to 25.4mm in Grades through and up to X-80 and 3,25,000mt per annum of API-grade LSAW (Longitudinal Submerged Arc Welding) Line pipes, ranging from diameters 16” to 60”, thicknesses 6.4mm to 65mm in Grades through and up to X-80. The facility is an amalgamation of best-in-class technologies including tube mill, Welding technology, Inspection technology and is fully automated with the least manpower requirement with respect to the prevailing industry norms.
API grades of steel pipes require a fine grain structure for maximum impact resistance an important performance feature for line pipe applications, preventing any crack in the steel from propagating down the line. The company’s products has been accorded American Petroleum Institute (API) certification besides recent approvals from SHELL GLOBAL, ENI, SAIPEM, OCCIDENTAL-QATAR and ECOPETROL,PACIFIC RUBILAES in Columbia within the last ten months, paving its way to cement its position in the highly demanding oil and natural gas industry.
BANKS SEE STRESS IN RS 230000.000 MILLIONS ESSAR LOAN
AUGUST 06, 2012
Ruia-controlled Essar Steel, which has debt of around Rs 230000.000 millions on its books, is 30 days behind in its interest payment schedule due to a "liquidity stress" within the company, bankers familiar with the development told moneycontrol.com. In banking parlance when a borrower stops paying interest on loans for 30 days, it is perceived to be under stress and bankers review the situation. The standard industry practice is that when the delay in payment exceeds 40 days, bankers and the borrowers start negotiations on whether the matter has to be referred to the Corporate Debt Restructuring (CDR) cell.
Of the 18-20 lenders which have loaned money to the privately-held Essar Steel, a leading state-owned bank is said to have the highest exposure of close to Rs 90000.000 millions.
"We are in talks with the management to sort of the issue. There are some liquidity issues hurting its business, but the situation is still not beyond redemption yet," said a senior banker at a PSU bank, adding that if the delay persisted, debt restructuring would have be considered.
A loan account can be referred to the CDR cell when at least 75% of the banks (by value) and 60% of lenders (by number) agree to resolve the case under CDR mechanism. Under the terms of CDR, either the interest rate is reduced or the tenure extended, so that the loan does not become a non-performing asset for the bank. Under Reserve Bank of India rules, a loan account becomes a non-performing asset after 90 days of continuous non-payments.
In response to moneycontrol.com's queries, Essar Steel said they had more than enough assets to back the loans, and expected cash flows from their newly set-up plants to pick up soon.
"We have invested around Rs 370000.000-380000.000 millions to create our current asset base, which includes facilities in Hazira, Odisha, and Visakhapatnam," said Amit Agarwal, CFO, Essar Steel.
"The replacement value of this asset base would be in excess of Rs 650000.000-700000.000 millions. Considering the debt level, we have a comfortable asset cover," said Amit Agarwal, CFO, Essar Steel.
And he says, the company has not violated any interest payment norm.
"Payments and such things (interest and principal) are based on certain norms. And we are always meeting all those norms. All are in line with banking industry norms," he said.
Will Essar Steel's loan be referred to the Corporate Debt Restructuring cell? The company denies things will come to that, and is in talks with the banks to resolve the issue.
"The company has a liquidity stress impacting their interest payments, but it could also be a short term issue," said a senior banker.
"The question is cash flow generation. Asset base can generate cash flow when it is sold at present value. In the current economic scenario, who will buy them at double the price?," the banker said.
Industry people say the liquidity problem could be due to group level problems.
Group company Essar Oil has been asked by the Supreme Court to pay back Rs 63000.000 millions to the Gujarat government as it was not eligible for the sale tax incentives it had claimed.
Also, the global steel industry is going through a rough patch because of worldwide economic slowdown. Locally, the problems have been caused by raw material shortages, particularly coal.
Last week, rating agency Standard & Poor's downgraded its rating on Arcelor Mittal to below junk grade, citing the weak steel environment as one of the key factors.
If Essar Steel is unable to resolve does knock the door of CDR cell due to drying up cash flows, it could well be a major shock for the banking industry after Air India (at around Rs 220000.000 millions) and Kingfisher airlines (nearly Rs 70000.000 millions).
Rating agency Crisil sees bad loans in the banking industry to rise to Rs.2000000.000 millions or 3.2% of the total loans by March, 2013. So far this financial year till July, around Rs 260000.000 millions of loans have been referred to the CDR.
Rating agency Care had assigned Essar Steel a rating of A-1 in January, 2012 for their secured and unsecured loans. It is currently in the process of reviewing the rating. The rank A-1 signifies a little above 'moderate' (BBB) but below 'adequate' (A) by standard. AAA is the 'best' while 'AA' is good
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON DESIGNATED
PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions involving
their assets have been blocked or convicted, found guilty or against whom a
judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs. 57.78 |
|
|
1 |
Rs. 89.71 |
|
Euro |
1 |
Rs. 76.24 |
INFORMATION DETAILS
|
Report Prepared
by : |
BVA |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
5 |
|
PAID-UP CAPITAL |
1~10 |
5 |
|
OPERATING SCALE |
1~10 |
4 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
4 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
5 |
|
--LEVERAGE |
1~10 |
5 |
|
--RESERVES |
1~10 |
5 |
|
--CREDIT LINES |
1~10 |
4 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
NO |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
DEFAULTERS |
|
|
|
--RBI |
YES/NO |
NO |
|
--EPF |
YES/NO |
NO |
|
TOTAL |
|
42 |
This score serves as a reference to assess
SC’s credit risk and to set the amount of credit to be extended. It is
calculated from a composite of weighted scores obtained from each of the major
sections of this report. The assessed factors and their relative weights (as
indicated through %) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend (10%) Operational size
(10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or
its officials.